I always see movies, read articles about it, but I never actually got to talk to an investment banker that was working in NYC in that time.
How did it feel ? Were you laid off ? Did you get hate from your not-so-close friends that think you are responsible for it ?
Is there people who were in Lehman Brothers at that time ? How difficult was it to find a new job ?
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The 2007-2009 period in investment banking was a rollercoaster of emotions and challenges, as shared by various professionals on WSO. Here's a breakdown of what it was like:
The Atmosphere and Layoffs:
Lehman Brothers and Job Market:
Public Perception and Personal Impact:
Reflections and Recovery:
In summary, the 2007-2009 period was a mix of fear, uncertainty, and eventual recovery. It tested the resilience of those in the industry and left a lasting impact on their careers and lives.
Sources: Graduating into a Bad Economy, How bad are things going to get?, GS Layoffs hit NY, 08' Recession - How bad was it really?, JP Morgan Officially about to Cancel Summer Internships and Freeze Hiring
It was pretty wild (I was born in 2005)
Me wondering what a 15 year old is doing here… where does the time go?
Not me but my dad worked for Bear until the very end. I’ve talked to him about it a good amount.
He said things were pretty dystopian during the last few weeks of the firm. People would come into the office but there was no work to do, so everyone was sitting around reading news about the unfolding disaster. A lot of dark humor going around.
After that it was musical chairs to find a spot in the new landscape, but most people landed on their feet. JP only took on a few people from Bear (literally just a couple dozen) so everyone else had to hustle. Even though most people found a new role, he said they all knew the old culture / pay was gone forever. Some of his friends left the industry voluntarily.
My memory from that time is going to Disneyland because he had two months paid time off from JP Morgan lol
I was in S&T so not yet in banking. I remember texting (probably using BBM - the goat) a hedge fund client on Sunday when the news broke that JPM was buying Bear for $2. He didn’t believe me. I had friends who were IB analysts. We certainly knew it was bad but being only 2-3 years out of undergrad really didn’t have perspective on just how insane things were - at least initially.
Dealbreaker dot com was the must read daily and often how people found out when the next layoffs were coming, rumors etc. Also had extensive Epstein coverage that would somehow become breaking news 10yrs+ later, but I digress.
The other thing I always think about from that era is when I was a ~2nd yr Associate at a BB a few years post GFC. My MD, who was a 2nd-3rd yr MD at the time, mentioned the most he had ever been paid to-date was as a 3rd yr VP in 2008. It was glory days, until it wasn’t.
Like Jeff Epstein’s pervert island coverage? It was covered back then?
Yeah it was. Then it went silent and came back again in 2019
Yes. I have yet to hear one name or material detail that I didn’t know in 2006-2009
First I want to debunk the myth that the 2000s were some golden era for banking.
2001 - 2003 literally 50% of FO banking jobs were termed. There was no precedent. It was carnage.Survival was your job, let alone a bonus.
2004, comp was inflation adjusted lower than it was today
2005, 2006 were glorious years, great money, tons of deals, lots of fun
2007 felt fin de siecle. We all got paid and it was like partying on the Titanic. Lot of fun but it was all coming to an end.
2008 was carnage again. Banks actually made good money in the volatility but I’d say about 30% of FO was cut
2009 was a zombie year. It was good for me because I did a ton of restructuring but most of my friends (the ones that survived) were at the bar at 3pm for lack of things to do.
That decade had some great highs but very low lows, and I’d say 30% kept their seats at the end.
It had to be insane. There is this Lehman list floating around and I checked the salaries of associates back then. .
I am based in Frankfurt and the salaries they got paid nearly ~20 years ago is absolutely mind boggling. If you consider that in 2007 you probably not even pay half for a flat then what you paid today and a doner kebap cost like 3 EUR (vs. 10 EUR today) those guys were actually making bank.
Bruh just say the numbers. What was the Pay like 20 years ago at Lehman?
https://web.stanford.edu/~jbulow/lehmandocs/docs/LARRY%20WIESENECK/LW%2000893-00927.pdf
Seems a tad higher then vs now in nominal terms
It was the best of times, it was the worst of times....
There are some interesting old threads from around that time providing a live look at people's thoughts as different banks went under. Wild to see the different takes vs. how things actually played out! https://www.wallstreetoasis.com/forum/investment-banking/lehman-brother…
Lehman was awesome. When I was looking to lateral as an associate in the mid 2000s, had offers from JPM (which was perceived as a lesser brand and still had the stench of Chase / Chenical Bank) and a firm which I joined that is widely seen as top notch today. I was rejected from Lehman that was my strong first choice.
I was an analyst in 2009. It was bad. Lots of layoffs and tons of pitching. Got yelled at a lot. My first bonus was $2,000.
Did banking in NY '06 - '08 and PE '08 - '11
Multiple rounds of layoffs as we were overstaffed from the good times of '05-'07 and management tried to not cut as much as needed.
Analysts were relatively safe from layoffs unless they had known safe landing (known PE job) or were under-performers.
Coverage and product groups were given layoff quotas.
Associate to Execution-Oriented Directors had it rough. You either needed to be top bucket, find safe harbor with an MD still eking out deals or jump to the Restructuring Group.
Super limited deal flow - juniors were surfing the web or studying for the GMAT.
I was laid off as I had safe landing. Ended up in distressed PE which was booming...always opportunities even in bad markets.
2005-2007 was amazing.
Made more money than today’s bankers on a notional basis before you even factor inflation. I don’t even really think we had expense account guidelines. Great parties hosted by the firms.
2008-2010, everything went to shit. 2008 was such a frightening year. A lot of people were basically kicked out of the industry and never made it back
The "never made it back" comment reminds me of a story:
It was '09 and I was having drinks with a couple. The guy is at a HF. The girl was a former banking colleague who was laid off. HF guy says "Yeah, one good thing about this market is that it removes all the people who shouldn't have been in finance to begin with."
Unsurprisingly, they broke up a few months later.
Did people eventually make it back to the industry who wanted to or were some forced to do smt else in their careers permanently?
Why were people payed relatively more back then?
Was there some form of justification, or has the industry come under scrutiny over the years, so they’ve been cut back?
Much less regulatory scrutiny before the 2008 calamity
A lot more financial wizardry and risk-taking
Less public scrutiny on compensation. In 2008+ banks were receiving financial assistance from the federal government.
Theres an account that floats on the S&T forum that claims to be Dick Flud, huge if true but probably fake. Did a bunch of AMAs and always ends up blaming Lehmans collapse on Goldman and how Paulson and the fed were a bunch of Goldman shells. Gives an interesting yet pretty funny perspective on the collapse (again if true).
If you go to the top OAT on the S&T forum you'll find the posts
there's a book on how govt sachs could've prevented the collapse of Lehman too lol. i also wonder what would've been the outcome if it wasn't an election year
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